Why Ballmer's Departure Isn't On My Worry List

Steve Ballmer's impending departure is a big deal ... if you work at Microsoft. Or if you're worried about your MSFT stock price. (Disclosure: I don't hold any individual tech stocks.) But when you're in the business of running an IT organization, you tend to take the CEO change at yet another large, legacy supplier in stride.

I'm not saying that leadership changes aren't important. But I ask myself several clarifying questions before adding a supplier CEO change to my worry list.

1. Could the change destabilize or even threaten the viability of our supplier in the short- or medium-term?

If my organization depends on a startup or small, established company for something mission critical, and a change in leadership signals that the company is on the decline, I would start doing contingency planning with my IT colleagues and the organization's leadership team. But a CEO change at Microsoft doesn't worry me, even if the company has lost its "we control everything about computing" mojo.

Could a new CEO help restore Microsoft to some semblance of dominance? Sure. But as an end user rather than an investor, I'm less concerned about the upside of that outcome than the potential downside to my organization.

2. Have I fallen into the "single supplier" trap?

A change in vendor leadership can sometimes lead to product price increases and thus hurt my bottom line. So this one is at least a candidate for my worry list. We, like many other enterprises, run a truckload of ISV apps on Windows server/SQL platforms, and we pay maintenance fees on many of the critical ones.

But we've diversified in other areas. I remember when my staff was insistent that Windows Mobile was going to be the light and the way. (The Microsoft machine had done a great job of convincing them that "standardization" was the easy and sensible path.) "Nobody's going to use that Apple stuff for business!" was the anti-rallying cry when we started deploying iPhones. Meanwhile, as an observer I've noted that Sears and Office Depot are now using iPads and iPhones as a part of their retail operations.

Point is, we didn't give in to the fact that our IT staff was comfortable with the Microsoft ecosystem. We use non-Microsoft content management, phones and systems management tools. So our future (and budget) isn't completely dependent on Microsoft -- another reason Ballmer's leaving isn't at the top of my worry list.

I need some tech suppliers, most notably my ERP supplier, to produce innovations on a regular basis, or at least enable my team to produce innovations on its platform. But Microsoft isn't my ERP supplier.

I'm not looking to Microsoft for innovations. I'm looking to spunky startups or larger, enterprise-focused suppliers (not the makers of Xbox and Kinect). Granted, Microsoft's experiments with tablets are interesting, but it's the follower, not the innovator, in this sector. And don't get me started about Windows 8.

4. Is this the founding, visionary CEO?

When CEO Steve Jobs died, it rocked the world of enterprise customers who depend on Apple. Jobs not only had founded Apple, but he led it out of hard times. Will Jobs successor Tim Cook be able to sustain the company's innovation?

Students of business understand all too well what happen when a visionary founder leaves a company. The canonical example is Edwin Land, the scientist and visionary who led Polaroid to temporary greatness. Polaroid fortunes didn't do so well after Land's departure.

But Ballmer's not the Microsoft founder. He did a pretty good job of working with what he had, sustaining Microsoft's gigantic machine during a fiercely competitive period. Microsoft has already proved that there's life after Bill Gates.

Ballmer and Microsoft's board are changing direction to become a "devices and services company." With Microsoft taking a year to find and prepare its next CEO, you can bet the transition will be orderly -- and if the company does it right it will re-instill some product and strategy mojo.

Worst-case scenario, Microsoft will muddle along, churning through a couple of CEOs (much as HP did) while watching its stock price dive. But even under that scenario, it still would invest in and ship key products and provide support.

If I were a day trader or stock analyst, I might agonize over Microsoft's CEO transition a lot more, but I'm in the business of enterprise IT, so I'm just watching with casual interest.

Like IBM when it brought Gerstner in, Microsoft under its new leadership is going to have to make some choices. It can't dominate every market. Perhaps it can't dominate any of them anymore. Some markets aren't worth the attempt at domination. IBM got out of the PC and low-end server businesses and decided it wouldn't focus on enterprise applications. Where will Microsoft refine its focus?

==-It dam well BETTER affect product maintenance, development, etc! The fact that he screwed those up too (they do a crappy job of maintenance and the direction of development was all Ballmer's fault) is why we've been clamoring for him to leave.

Maybe, but only if they buy the right companies. HP spent a fortune on Autonomy and is still a mess. And several years ago, Microsoft was prepared to plunk down what would have been a preposterous chunk of its assets for Yahoo. Dell's multi-billion dollar spending spree still hasn't offset the damage its PC business has sustained. Microsoft has the money to buy almost anything it wants-- but will its leaders have the vision to make the correct calls? And that's not even getting into the influence activist investors could have over future acquisitions.

Ms total assets 142B$, apple 176, google 94.Just look what the picture looked like a decade ago!Ms total assets 67, apple 6, google 0,2: one or two orders of magnitude of growth loss by Ballmer.

Armageddon come and gone, now ms is no longer leader in access to web/cloud/advertising, Google Android is.Efforts to kill the desktop by Ballmer himself (it is legacy, i'll bet the company on 8, metro is here to stay... and so on) are negatively effecting ONLY ms, to the point windows is the only mayor os not growing in those years.it market is growing exponentially, but not for ms, that now is already smaller or comparable to opponentes it totally dwarfed a decade ago.Under ballmer ms refused to grow in mobile and embedded markets, and now this madness comes painfully evident, but it is a trend started one decade ago.

From an innovation perspective Microsoft will be a lot like Oracle has become. Others will innovate in the market. Microsoft will loose business to the innovators. Since Microsoft can't beat them Microsoft will buy them just as Oracle has. Big money always seems to win in the end no matter how poorly they are run or how terrible they treat their customers.

Based on Microsoft's recent track record with consumers, that would not be a wise move for Ballmer's successor. Especially if a ramped up consumer focus comes at the expense of the company's enterprise cash cows. But yes, an over-eager successor fixating on consumers is a concern for enterprise IT leaders that lean heavily on MS business products. It's hard to think of a more difficult job to walk into than MS CEO. I see parallels with Barack Obama taking over the presidency in 2008. Obviously not THAT difficult, but very difficult.

Indeed. I think the final months of Ballmer's leadership could determine whether the next CEO continues to pursue consumers. But this passage from the story struck me as very wise: "Worst-case scenario, Microsoft will muddle along, churning through a couple of CEOs (much as HP did) while watching its stock price dive. But even under that scenario, it still would invest in and ship key products and provide support." Whether Microsoft keeps chasing consumers or not, the company's not facing armageddon yet, and neither are most customers who use its products.